One of the more intriguing aspects of the current financial chaos is its effect on political reputations. In the US, it has finished off President Bush’s. He is seen as deeply tainted by events. The perception is that not only was there a lack of proper political oversight of the banks and financial institutions but that it happened because of his administration’s links with big business. The view that there has been moral corruption at the heart of Washington is playing out in the opinion polls. Before the crisis, Barack Obama and John McCain were running neck and neck; now, with financial trustworthiness a key issue (way ahead of foreign policy or Iraq), Obama is the clear beneficiary.
Things could not be more different in Europe. In France and the UK, the two countries taking the lead in organizing a European response to the crisis, the reputations of President Nicolas Sarkozy and Prime Minister Gordon Brown have been dramatically boosted by their response to events, even though that response does not differ markedly from George Bush’s. On both sides of the Atlantic, astronomical amounts of money are being provided to prop up the markets; in both places too, the politicians’ initial ideas had to be reshaped as the crisis mutated — and will probably be shaped afresh as it mutates yet again and becomes more virulent.
When it started, Sarkozy’s reputation was distinctly shaky. It was better than in early summer, when his popularity was at rock bottom largely because of his private life and concerns about his seriousness. But while his action-man image helped, seen when he rushed to Afghanistan, vowing not to be deterred after 10 French soldiers were killed there by the Taleban, and in the tough negotiations between Russia and Georgia, there was still deep suspicion in France that he was more interested in grand political gestures than hard work.
The accusation about the grand political gesture rings true, but now it is working in his favor. Many, including the German government, saw his European copy of President Bush’s $700-billion rescue package as precisely that, a grand gesture. The result was scorn. But now that the Europeans have come up with their own, even more expensive package, he is basking in the limelight, enjoying the credit for having stuck to his guns and forced a squabbling and divided Europe to act responsibly.
The turnaround for Gordon Brown is even more remarkable. Before the crisis he was seen as a bust figure. The consensus from left to right in the UK was that Labour would lose the next election by a landslide and that there was nothing that it could do about it. Now, thanks to Brown’s bank buy-out scheme, which Europe and then the US have copied, he is seen as the savior of the day and Labour is breathing heavy sighs of relief. Whether it will do him or the party any good in the longer term is questionable. He may well be tempted to call a snap election on the back of his present success. There certainly will be many in the Labour party urging him to do so. Whether he would win is another matter.
While there is a new respect for him, he is still not liked. Moreover, it could all still go horribly wrong in the four or five weeks between calling an election and the vote. It was another Labour prime minister, Harold Wilson, who famously said that a week is a long time in politics; these days, as the current financial turmoil shows, 24 hours is long time in politics — and the politicians are as much mere observers as the rest of us — but observers held responsible. That being so, today’s respect can so easily turn into tomorrow’s renewed contempt.
